Despite Heavy Sanctions, Russia’s Crypto Trading Volume Has Been on A Decline

There’s an interesting twist in the narrative that Russian’s have been buying Bitcoin and crypto to avoid sanction. There was also a belief that the early week rally in the crypto market was due to Russians flocking to crypto in heavy numbers

But recent market data suggests that the narrative isn’t quite true. As per blockchain analysis firm Chainalysis, the Ruble-denominated activity has been on a decline over the last week.

As of Thursday, March 3, the Ruble-denominated activity stood at $34.1 million, a 50% decline against $70 million in the previous week on February 24. Furthermore, it is 75% down from the record $158 million in May 2021.

This shows that although crypto transactions from Russia picked up during the onset of the war, they were on a decline in the days later. Madeleine Kennedy, senior director of communications at Chainalysis said: “This is a fraction of the volume that was seen during the all-time highs of Russian crypto trading volume reached May 2021”.

Another report from Citigroup shows that the average Bitcoin buying in Russia over the last week was just 210 BTC per day. This was quite less in comparison to the trading volumes witnessed last year.

In its Wednesday report, Citi analysts including Alexander Saunders wrote: “Russian volumes have been relatively small so far, suggesting that the price action is more due to investors positioning for an expected uptick in demand from Russia, rather than Russian demand itself. It will take meaningful capital flight to move the needle.”

The recent financial sanctions on Russia has really put a dent on the country’s economy. The U.S. and NATO allies are closely monitoring that the Russian oligarchs and government officials don’t leverage crypto to bypass the sanctions.

Some of the lawmakers have been putting severe pressure on U.S-based crypto exchanges and ban all Russian users from the platform. However, exchanges like Binance, Kraken, and Coinbase have refrained from a sweeping ban and are allowing ordinary Russian investors to trade on the platform.

But as Russia turns aggressive against Ukraine, crypto markets continue to remain under pressure. After Russia’s siege of Ukrainian nuclear plant on Thursday, there was a sharp fall in the crypto space. Bitcoin (BTC) is trading 5% down at $41,500 levels.

Any fall further under $40,000 could see Bitcoin correcting all the way to $35,000 once again.